Who is responsible? Tenant turns the tables

Our panel of experts answers property investment questions from API readers. For more Q&As, see this month’s API magazine.

Who is responsible?

Q Our side neighbour uphill has altered the natural ground level and built up his back yard (to around 2.8 metres) and retained it with iron sheets held with star pickets. My engineer has warned us in writing to keep away from it. The neighbour is adamant that I'm responsible for retaining it as I'm on the downside. That's one point of view. Another is that the person who changes the natural ground level is responsible for retaining it. Another again is that the property that benefits from the wall is responsible for it. Does the downside property benefit because the land is retained from falling on them, or the upside property as their land is retained from falling away and they get a level block?

If there's some clear guidance somewhere this would be very helpful. The council has no guidance, the Queensland Law Society has no guidance and a property lawyer says it's common law.

A A "Lawyers Practice Manual" less-than-helpfully states that Queensland law is "not finally settled" on whether a retaining wall falls within the definition of a dividing fence under the Dividing Fences Act 1953. The manual continues: "A decision of a single judge of the Supreme Court of New South Wales held that a retaining wall did not fall under that state's Act. There are no corresponding Queensland decisions. Further, the Queensland Act defines a 'fence' as (among other things) 'a ditch or embankment'. The definition is not an inclusive one and apparently attempts to provide an exhausted list.

It can be argued that it was open to the legislators to include the words 'retaining wall'. At the time of passing the Act, retaining walls weren't unknown. However, there is a body of professional opinion that a retaining wall performs the function of a dividing fence, and should therefore fall under the Act. If this is the case, the major portion of the costs of repair and constructions, should, logically, be borne by the landowner who obtains the most benefit from the wall. This would depend on the circumstances of each individual case.

You could consider resolving any issues with your neighbour by mediation through the Queensland Government's Dispute Resolution Centre. Mediation endeavours to settle disputes without legal action. Alternatively, you could follow the appropriate steps under the Dividing Fences Act and, if your neighbour won't contribute to the cost of maintenance or repair of the wall, apply to the new Queensland Civil and Administration Tribunal for a test case resolution of your "dividing fence" dispute. Who knows? You might create a legal precedent. Tim O'Dwyer

Tenant turns the tables

Q I have an investment property in Caboolture, Queensland and have had that premises leased since purchasing. For the past three years I've had the same tenants and recently the company that looks after it wrote to me stating that the tenant had asked for a "periodic lease". I currently have them signing a six-month lease and increase the rent by $5 every six months when they re-sign.

My property manager told me the tenants are having "issues" with the neighbours (I'm told that the teenager next door is playing loud music in the garage when he does weights in there) and are considering moving if the problems persist.

I asked the property manager what this new lease would mean for me and was told the tenants wouldn't be locked in for six months on a periodic lease, but they still have to give a required amount of notice that they will be vacating. I agreed to this taking place.

Yesterday I was called by my property manager and informed that the tenant has come in to pay the rent and that they refuse to pay the rent increase (my nominal $5). I'm told that they started explaining their rights and that I now have to give them two months notice in relation to the rent increase.

The property manager informs me that she didn't know this and made enquiries with the Residential Tenancies Authority which told her this was correct.

My property manager has offered to decrease the management fees until this matter is rectified in two months. Isn't this unfair on landlords?

A The eternal question of 'fixed term vs periodic lease' is of constant concern with both landlords and tenants alike.

The definition of a fixed term tenancy is simply that it has a start date and an end date, as opposed to a periodic lease which has no end date. The main difference between them, however, is in the notice periods to be given by each party wishing to either terminate or to increase the rent. This also depends on which state you're in, but as the writer of the question comes from Queensland we shall address the legislation in this state.

Legislation states that the rent can't be increased during a fixed term agreement unless a special term of the tenancy agreement states that the rent can be increased. Other than this there are no timeframes required for notification of rent increases between fixed term leases. Whereas, rent can be increased at any time during a periodic agreement by giving the tenant at least two months written notice.

Regardless of the type of agreement, rent can't be increased within six months since the current amount became payable by the tenant. This applies even if there has been more than one fixed term agreement.

In the case of this incident, your options are: you can issue the tenant a notice to leave giving them two months written notice or you can negotiate a new fixed term lease with them at the required rent.

It seems that the real issue might be with the noisy neighbours. If this issue were removed, would the tenants be happy to sign another lease? Consult your property manager on how this situation may best be addressed for a harmonious outcome that will see your current tenants or any future tenants residing in a state of quiet enjoyment. Karen Herbert

For more Q&As, see API magazine.

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